After a lengthy enforced absence while battling prosecutors, Silicon Valley investment banker Frank Quattrone is back in business.

Quattrone has opened Qatalyst Group, a San Francisco boutique company that will advise Silicon Valley companies on mergers and acquisitions, help small companies raise capital and make a few investments of its own.

The 52-year-old former Silicon Valley star was widely expected to launch a new venture after prosecutors agreed last August not seek a third trial on charges of obstructing a 2003 investigation into his former employer, Credit Suisse First Boston.

His first trial ended in a hung jury in 2003; he was convicted in a second trial, but that conviction was overturned in 2006. Quattrone ended a “period of supervision” Aug. 31.

Quattrone at one point presented a judge with 500 letters from supporters – many of them the top names in Silicon Valley, who were unofficially dubbed “Friends of Frank.”

The Los Altos resident was not available for comment, but he issued a statement saying that he and his partners “are passionate about the opportunity to build a world-class firm” boasting a global network of relationships and an ability to dispense “senior-level advice.”

The company will have two wings, Qatalyst Partners, its investment banking and advice-dispensing side, and Qatalyst Capital Partners, which will make investments. It won’t be a brokerage, but it will be an adviser or underwriter on public offerings.

Longtime friends and associates said Quattrone had been biding his time for the past six months, looking for just the right niche on which to hang an “Open for Business” sign.

“He wanted to do it in exactly the right way,” said Jim Breyer of Accel Partners, who has known Quattrone since the early ’90s and worked on deals with him. “He has identified a very interesting part of the market that needs to be served. With the large investment banks increasingly focused on very large transactions, young, high-growth Silicon Valley companies will benefit greatly from the advice that Frank and his team will bring.”

Several valley executives welcomed Quattrone back.

“This is a guy that has enormous capability and experience in a world that’s mysterious to a lot of young companies, and even older companies,” said Bill Campbell, chairman of Intuit. “I’m excited he’s going to lend himself to us all.”

“I’m overjoyed that one of the world’s best investment bankers is back in business,” said T.J. Rogers, president and chief executive of Cypress Semiconductor, who publicly took Quattrone’s side from the beginning of the prosecution.

Eric Schmidt, chairman and chief executive of Google, said in a statement that the announcement was “an important development for the technology industry.”

“It’s great to have Frank back,” said Marc Andreessen, co-founder of Netscape and Ning. “He was the best in the ’90s and it’ll be great to be able to work with him again.”

Among Qatalyst’s founding partners are several former Credit Suisse First Boston alums who have since gone on to other ventures.

While the company’s applications are pending with the Securities Exchange Commission, Qatalyst will operate as a division of JMP Securities of San Francisco.

“He’s truly a legend in our business,” said Craig Johnson, president of JMP, who said he’s pleased to assist Quattrone’s new venture. “He’s certainly well known to lot of our clients who have a very high regard for him.”

Before prosecutors put him in their sights, Quattrone had built a storied career. Starting at a Philadelphia prep school on scholarship, he graduated with honors from the Wharton School at the University of Pennsylvania and earned an MBA from Stanford’s business school. Beginning in 1981 at Morgan Stanley, followed by Deutsche Bank and Credit Suisse First Boston, Quattrone helped launch some of the biggest initial public offerings of the 1990s tech boom, including those of Netscape, Amazon, Cisco and Intuit.